Section 1. Purpose. The purpose of
the Plan is to promote the long-term interests of the Corporation and its
stockholders by providing a means for attracting and retaining designated key
employees of the Corporation and its Affiliates through a system of cash
rewards for the accomplishment of long-term pre-defined objectives.

Section 2. Definitions. The
following definitions are applicable to the Plan:

“Affiliate” shall mean any “Parent Corporation”
or “Subsidiary Corporation” of the Corporation as such terms are defined in
Section 425(e) and (f), or the successor provisions, if any, respectively, of
the Code.

“Award” shall mean the grant by the Committee of
a Performance Unit or Units as provided in the Plan.

“Board” shall mean the Board of Directors of the
Corporation.

“Change of Control” shall mean any of the
following events:

(a) An acquisition by an
individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Exchange Act) (a “Person”) of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of
either: (1) the then outstanding shares of Common Stock of the Corporation
(the “Outstanding Corporation Common Stock”) or (2) the combined voting
power of the then outstanding voting securities of the Corporation entitled to
vote generally in the election of directors (the “Outstanding Corporation
Voting Securities”); excluding, however the following:

(A) any acquisition
directly from the Corporation or any entity controlled by the Corporation other
than an acquisition by virtue of the exercise of a conversion privilege unless
the security being so converted was itself acquired directly from the
Corporation or any entity controlled by the Corporation,

(B) any acquisition by
the Corporation, or any entity controlled by the Corporation,

(C) any acquisition by
any employee benefit plan (or related trust) sponsored or maintained by the
Corporation or any entity controlled by the Corporation or

(D) any acquisition
pursuant to a transaction which complies with clauses (1), (2) and
(3) of Section (c) below; or

(b) A change in the
composition of the Board such that the individuals who, as of the effective
date of the Plan, constitute the Board (such Board shall be hereinafter
referred to as the “Incumbent Board”) cease for any reason to constitute at
least a majority of the Board; provided, however, for purposes of
this Section (b) that any individual, who becomes a member of the Board
subsequent to the effective date of the Plan, whose election, or nomination for
election by the Corporation’s stockholders, was approved by a vote of at least
a majority of those individuals who are members of the Board and who were also
members of the Incumbent Board (or deemed to be such pursuant to this proviso),
shall be considered as though such individual were a member of the Incumbent
Board; but provided further, that any such individual whose initial
assumption of office occurs as a result of either an actual or threatened
election contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person
other than the Board shall not be so considered as a member of the Incumbent
Board, or

(c) Consummation of a
reorganization, merger or consolidation or sale or other disposition of all or
substantially all of the assets of the Corporation (a “Corporate Transaction”)
excluding, however, such a Corporate Transaction pursuant to which (1) all
or substantially all of the individuals and entities who are the beneficial
owners, respectively, of the Outstanding Corporation Common Stock and
Outstanding Corporation Voting Securities immediately prior to such Corporate
Transaction (the “Prior Stockholders”) beneficially own, directly or
indirectly, more than 60% of, respectively, the outstanding shares of
Common Stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as the case
may be, of the Corporation or other entity resulting from such Corporate
Transaction (including, without limitation, a corporation or other entity which
as a result of such transaction owns the Corporation or all or substantially
all of the Corporation’s assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership, immediately
prior to such Corporate Transaction, of the Outstanding Corporation Common
Stock and Outstanding Corporation Voting Securities, as the case may be,
(2) no Person (other than the Corporation or any entity controlled by the
Corporation, any employee benefit plan (or related trust) of the Corporation or
any entity controlled by the Corporation or such corporation or other entity
resulting from such Corporate Transaction) will beneficially own, directly or
indirectly, 20% or more of, respectively, the outstanding shares of Common
Stock of the Corporation or other entity resulting from such Corporate
Transaction or the combined voting power of the outstanding voting securities
of the Corporation or such other entity entitled to vote generally in the
election of directors except to the extent that such ownership existed prior to
the Corporate Transaction and (3) individuals who were members of the
Incumbent Board will constitute at least a majority of the members of the board
of directors of the corporation resulting from such Corporate Transaction; and
further excluding any disposition of all or substantially all of the assets of
the Corporation pursuant to a spin-off, split-up or similar transaction (a
“Spin-off”) if, immediately following the Spin-off, the Prior Stockholders
beneficially own, directly or indirectly, more than 80% of the outstanding
shares of common stock and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors of
both entities resulting from such transaction, in substantially the same
proportions as their ownership, immediately prior to such transaction, of the
Outstanding Corporation Common Stock and Outstanding Corporation Voting
Securities, respectively; provided, that if another Corporate
Transaction involving the Corporation occurs in connection with or following a
Spin-off, such Corporate Transaction shall be analyzed separately for purposes
of determining whether a Change of Control has occurred;

(d) The approval by the
stockholders of the Corporation of a complete liquidation or dissolution of the
Corporation.

“Code” shall mean the Internal Revenue Code of
1986, as amended, or its successor general income tax law of the United States.

“Committee” shall mean the Human Resources
Committee of the Board or any successor committee of the Board designated by
the Board to administer the Plan. Each member of the Committee shall be an
“outside director” within the meaning of Section 162(m) of the Code.

“Common Stock” shall mean the common stock, par
value $.01 per share, of the Corporation.

“Corporate Participant” shall mean any employee
of the Corporation or any of its Affiliates, other than an employee of MIL, who
is selected by the Committee to receive an Award.

“MIL” shall mean MoneyGram International Limited,
a United Kingdom company, or any successor corporation.

“MIL Participant” shall mean any employee of MIL
who is selected by the Committee to receive an Award.

“Money Transfer Line of Business” shall mean that
portion of the Global Funds Transfer segment of the Corporation’s business that
consists of person-to-person money transfer services and urgent bill payment
services. To the extent that new products or services and/or enhancements are
offered after the date the Plan is adopted, the Committee shall determine in
its sole discretion whether such products, services or enhancements are to be
included in the Money Transfer Line of Business.

“Money Transfer Operating or Pre-Tax Income”
shall have the meaning set forth in Section 6(b)(i).

“Operating or Pre-Tax Income” shall mean
operating income before minority interest, interest expense and taxes, after
deduction of corporate overhead, or pre-tax income after minority interest, in
each case adjusted to appropriately exclude the effects of gains and losses
from the sale or other disposition of capital assets other than vehicles.

“Performance Period” shall mean the period of
time selected by the Committee in connection with the grant of any Award under
the Plan for the purpose of determining performance goals and measuring the
degree of accomplishment.

Section 3. Administration. The Plan
shall be administered by the Committee. Except as limited by the express
provisions of the Plan, the Committee shall have sole and complete authority
and discretion to (i) select Participants and grant Awards;
(ii) determine the number of Performance Units to be subject to Awards
generally, as well as to individual Awards granted under the Plan;
(iii) select the performance goals and the Performance Period for any
Awards; (iv) determine the targets that must be achieved in order for the
Awards to be payable and the other terms and conditions upon which Awards shall
be granted under the Plan; (v) prescribe the form and terms of instruments
evidencing such Awards; and (vi) establish from time to time regulations
for the administration of the Plan, interpret the Plan, and make all
determinations deemed necessary or advisable for the administration of the
Plan. The Corporation expects to have the Plan administered in accordance with
the requirements for the award of “qualified performance-based compensation”
within the meaning of Section 162(m) of the Code.

Section 4. Performance Goals. The
Plan is intended to provide Participants with a substantial incentive to
achieve or surpass one or more pre-defined long-range financial goals during
the applicable Performance Period.

(a) At the effective
date of the Plan, for Corporate Participants two pre-defined long-range
financial goals have been selected because they are key factors in increasing
stockholder value. The first goal for Corporate Participants emphasizes growth
in Earnings Per Share from Continuing Operations for the Corporation as a whole
for the Performance Period. The second goal for Corporate Participants
emphasizes growth in Operating or Pre-Tax Income for the Corporation as a whole
for the Performance Period.

(b) At the effective
date of the Plan, for MIL Participants two pre-defined long-range financial
goals have been selected relating to the Money Transfer Line of Business. The
first goal for MIL Participants emphasizes growth in Money Transfer Operating
or Pre-Tax Income for the Money Transfer Line of Business for the Performance
Period. The second goal for MIL Participants emphasizes growth in Gross Profit
for the Money Transfer Line of Business for the Performance Period.

(c) The Committee may,
however, in its discretion, select different long-range financial goals for
Corporate Participants or MIL Participants at any time and from time to time in
connection with the grant of any Awards under the Plan; provided, however, that
any such goal must be permitted under the terms of the 2004 Omnibus Plan if the
Award is granted prior to the effective date of the 2005 Omnibus Plan or the
terms of the 2005 Omnibus Plan if the Award is granted on or after the
effective date of the 2005 Omnibus Plan.

Section 5. Performance Period. At the
effective date of the Plan, the Performance Period is a period of either two or
three successive fiscal years of the Corporation, depending on the Award. The
Committee may, however, in its discretion, select different Performance Periods
of not less than two years and not more than five years, at any time and from
time to time in connection with the grant of any Awards under the Plan.

Section 6. Determination of Targets.

(a) Targets for Corporate Participants.

(i) Average Growth in
Earnings Per Share from Continuing Operations. Earnings Per Share from
Continuing Operations will be calculated on a diluted basis, the numerator of
which is earnings from continuing operations and the denominator of which is
diluted shares calculated in accordance with accounting principles generally
accepted in the United States.

An appropriate average growth
in Earnings Per Share from Continuing Operations target for the Corporation for
the Performance Period will be established by the Committee after considering
historical income per share from continuing operations, financial plan income
per share from continuing operations for the Performance Period, overall
corporate objectives and, if appropriate, other circumstances. An appropriate
range of values above and below such target will then be selected to measure
achievement above or below the target.

(ii) Average Growth in
Operating or Pre-Tax Income. An appropriate average growth in Operating or
Pre-Tax Income target for the Corporation for the Performance Period will be
established by the Committee with a focus on enhancing profitable top-line
growth. An appropriate range of values above and below such target will then be
selected to measure achievement above or below the target.

(b) Targets for MIL Participants.

(i) Average Growth in
Money Transfer Operating or Pre-Tax Income. An appropriate average growth
in Money Transfer Operating or Pre-Tax Income target for the Money Transfer
Line of Business for the Performance Period may be recommended by the Chief
Executive Officer of the Corporation to the Committee for approval, taking into
account overall objectives, historical income and financial plan income (on the
same basis as determined below) for the Money Transfer Line of Business and, if
appropriate, other circumstances.

“Money Transfer Operating or
Pre-Tax Income” shall mean operating income for the Money Transfer Line of
Business before minority interest, interest expense and taxes, after deduction
of corporate overhead, or pre-tax income after minority interest, in each case
adjusted to appropriately exclude the effects of gains and losses from the sale
or other disposition of capital assets other than vehicles. Any significant
unusual or non-recurring items will be excluded for purposes of determining
actual or target Money Transfer Operating or Pre-Tax Income.

(ii) Average Growth in
Gross Profit. An appropriate average growth in Gross Profit target for the
Money Transfer Line of Business for the Performance Period will be established
by the Committee with a focus on enhancing profitable top-line growth for the
Money Transfer Line of Business. An appropriate range of values above and below
such target will then be selected to measure achievement above or below the
target.

(c) Establishing Targets.
The appropriate weighting of goals, targets, range of values above and below
such targets and the Performance Period to be used as a basis for the
measurement of performance for Awards under the Plan will be determined by the
Committee no later than 90 days after the beginning of each new
Performance Period during the life of the Plan, after giving consideration to
the recommendations of the Chief Executive Officer of the Corporation.
Performance Units will be earned based upon the degree of achievement of
pre-defined targets over the Performance Period. Earned Performance Units may
range, based on achievement of pre-defined targets over the Performance Period,
between values from 0% to 200% of the Performance Units.

(d) Calculation of
Performance Relative to Targets. Earnings Per Share from Continuing
Operations, Operating or Pre-Tax Income, Money Transfer Operating or Pre-Tax
Income and Gross Profit for the Money Transfer Line of Business are determined
before unusual or extraordinary items, effects of changes in accounting
principles or a change in federal statutory income tax rates (and not a change
in the effective tax rate applicable to the Corporation) after the target has
been set. Reclassification of a major business unit to discontinued operations
status after targets have been set would also require adjustment because of the
effect on continuing operations results. While gains on disposition of a
business would normally not be included in determining Earnings Per Share from
Continuing Operations, in the event of a sale of a subsidiary or major business
unit, a portion of gain would be included equal to the difference between the sold
unit’s planned net income for the Performance Period and actual results to date
of sale plus calculated interest savings on proceeds for the balance of the
Performance Period, so that actual results are not penalized for selling a
business.

Incentives to be paid to
Participants under this Plan must be deducted from the Corporation’s Earnings
during the Performance Period (generally in the final year of the Performance
Period, when the amounts to be paid can be reasonably estimated). Goals must be
achieved after deducting from actual results all incentive compensation
applicable to such Performance Periods, including those incentives earned under
the Plan.

Section 7. Range of Performance Awards.
The range of values for Earnings Per Share from Continuing Operations
performance, Operating or Pre-Tax Income performance, Money Transfer Operating
or Pre-Tax Income, Gross Profit for the Money Transfer Line of Business
performance or other performance measures relating to any Award will be
recommended by the Chief Executive Officer of the Corporation for approval by
the Committee. Performance Units will be earned based upon the degree of
achievement of each of the pre-defined targets over the Performance Period.

Section 8. Participant Eligibility.
Personnel will be eligible for participation as recommended by the Chief
Executive Officer of the Corporation to the Committee, limited only to those
key employees who contribute in a substantial measure to the successful
performance of the Corporation or its Affiliates. The Chief Executive Officer
will recommend for approval by the Committee the Affiliates, if any, that
should be included in the Plan.

Section 9. Award Determination. The
number of Performance Units to be awarded to any Participant will be
determined, generally, by multiplying a factor times the Participant’s annual
base salary in effect at the time the Award is granted and dividing the result
by the average of the high and low sales prices of the Corporation’s Common
Stock on the New York Stock Exchange as reported on the consolidated
transaction reporting system on the date of approval of the grant by the
Committee. The Award factor will be recommended by the Chief Executive Officer
of the Corporation for approval by the Committee annually no later than
90 days after the beginning of each new Performance Period. After such
90-day period, the Committee may, in its discretion, decrease the number of
Performance Units awarded to any Participant. The Committee may not, however,
increase the number of Performance Units awarded to any Participant after such
90-day period. The number of Performance Units awarded to any Participant under
the Plan will be subject to the applicable limits set forth in the 2004 Omnibus
Plan if the Performance Units are granted prior to the effective date of the
2005 Omnibus Plan or the applicable limits set forth in the 2005 Omnibus Plan
if the Performance Units are granted on or after the effective date of the 2005
Omnibus Plan.

Section 10. Repayment Provisions.

(a) Non-Compete. Unless
a Change of Control shall have occurred after the date hereof:

(i) In order to better
protect the goodwill of the Corporation and its Affiliates and to prevent the
disclosure of the Corporation’s or its Affiliates’ trade secrets and
confidential information and thereby help ensure the long-term success of their
respective businesses, each Participant in the Plan, without prior written
consent of the Corporation, will not engage in any activity or provide any
services, whether as a director, manager, supervisor, employee, adviser, agent,
consultant, owner of more than five percent of any enterprise or otherwise, for
a period of two years following the date of such Participant’s termination of
employment with the Corporation or any of its Affiliates, in connection with
the manufacture, development, advertising, promotion, design, or sale of any
service or product which is the same as or similar to or competitive with any
services or products of the Corporation or its Affiliates (including both
existing services or products as well as services or products known to such
Participant, as a consequence of such Participant’s employment with the
Corporation or one of its Affiliates, to be in development):

(A) with respect to
which such Participant’s work has been directly concerned at any time during
the two years preceding termination of employment with the Corporation or one
of its Affiliates, or

(B) with respect to
which during that period of time such Participant, as a consequence of
Participant’s job performance and duties, acquired knowledge of trade secrets
or other confidential information of the Corporation or its Affiliates.

(ii) For purposes of the
provisions of Section 10(a), it shall be conclusively presumed that a
Participant in the Plan has knowledge of information he or she was directly
exposed to through actual receipt or review of memos or documents containing
such information, or through actual attendance at meetings at which such
information was discussed or disclosed.

(iii) If, at any time
within two years following the date of a Participant’s termination of
employment with the Corporation or any of its Affiliates, such Participant
engages in any conduct agreed to be avoided in accordance with Section 10(a),
then all Awards paid under the Plan to such Participant during the last 12
months of employment shall be returned or otherwise repaid by such Participant
to the Corporation. Participants in the Plan consent to the deduction from any
amounts the Corporation or any of its Affiliates owes to such Participants to
the extent of the amounts such Participants owe the Corporation hereunder.

(b) Misconduct. Unless
a Change of Control shall have occurred after the date hereof, all Awards paid
under the Plan to any Participant shall be returned or otherwise repaid by such
Participant to the Corporation if the Corporation reasonably determines that
during a Participant’s employment with the Corporation or any of its
Affiliates:

(i) such Participant
knowingly participated in misconduct that causes a misstatement of the
financial statements of the Corporation or any of its Affiliates or misconduct
which represents a material violation of any code of ethics of the Corporation
applicable to such Participant or of the compliance program or similar program
of the Corporation; or

(ii) such Participant
was aware of and failed to report, as required by any code of ethics of the
Corporation applicable to such Participant or by the Always Honest compliance
program or similar program of the Corporation, misconduct that causes a
misstatement of the financial statements of the Corporation or any of its
Affiliates or misconduct which represents a material knowing violation of any
code of ethics of the Corporation applicable to such Participant or of the
Always Honest compliance program or similar program of the Corporation.

Participants in the Plan
consent to the deduction from any amounts the Corporation or any of its
Affiliates owes to such Participants to the extent of the amounts such
Participants owe the Corporation hereunder.

(c) Acts Contrary to the
Corporation. Unless a Change of Control shall have occurred after the date
hereof, if the Corporation reasonably determines that at any time within two
years after the grant of any Awards under the Plan to a Participant that such
Participant has acted significantly contrary to the best interests of the
Corporation, including, but not limited to, any direct or indirect intentional
disparagement of the Corporation, then any Awards paid under the Plan to such Participant
during the prior two-year period shall be returned or otherwise repaid by the
Participant to the Corporation. Participants in the Plan consent to the
deduction from any amounts the Corporation or any of its Affiliates owes to
such Participants to the extent of the amounts such Participants owe the
Corporation hereunder.

(d) Reasonable
Determination. The Corporation’s reasonable determination required under
Sections 10(b) and (c) shall be made by the Committee, in the case of
executive officers (as defined in Section 16(b) of the Exchange Act) of the
Corporation, and by the President and Chief Executive Officer and Corporate
Compliance Officer of the Corporation, in the case of all other personnel.

Section 11. Adjustments. Any
recapitalization, reclassification, stock split, stock dividend, sale of
assets, combination or merger not otherwise provided for herein which affects
the outstanding shares of Common Stock of the Corporation or any other change
in the capitalization of the Corporation affecting the Common Stock shall be
appropriately adjusted for by the Committee, and any such adjustments shall be
final, conclusive and binding.

Section 12. Payment of Awards.

(a) The Committee will
determine whether and to what extent any Award becomes payable under the Plan.
Any Award determined to be payable by the Committee shall be subject to the
following calculation: each Performance Unit payable shall be multiplied by the
average of the high and low sales prices of the Corporation’s Common Stock on
the New York Stock Exchange as reported on the consolidated transaction
reporting system during the ten trading day period beginning on the day
following public announcement of the Corporation’s year-end financial results
following the Performance Period. Payment of the Award will be made following
Committee approval within 75 days following the close of the Performance
Period. The Committee shall certify in writing that the performance goals have
been met prior to payment of the Award to the extent required by
Section 162(m). For those Executive Officers affected by Section 162(m) of
the Code, Awards will be subject to discretionary downward adjustment by the
Committee. Amounts payable under any Award will be subject to the limits set
forth in the 2004 Omnibus Plan if the Award was granted prior to the effective
date of the 2005 Omnibus Plan or the limits set forth in the 2005 Omnibus Plan
if the Award was granted on or after the effective date of the 2005 Omnibus
Plan.

(b) Awards granted under
this Plan shall be payable during the lifetime of the Participant to whom such
Award was granted only to such Participant; and, except as provided in
(d) and (e) of this Section 12, no such Award will be payable
unless at the time of payment such Participant is an employee of and has
continuously since the grant thereof been an employee of the Corporation or an
Affiliate. Neither absence nor leave, if approved by the Corporation, nor any
transfer of employment between Affiliates or between an Affiliate and the
Corporation shall be considered an interruption or termination of employment
for purposes of this Plan.

(c) If authorized by the
Committee, payment of all or a portion of any earned Award may be deferred
pursuant to a deferred compensation plan of the Corporation then in effect; provided
that the election to defer payment of any earned Award must be made at
least six months prior to the expiration of the applicable Performance Period
or as otherwise required by Section 409A of the Code.

(d) Unless otherwise
determined by the Committee, if a Participant to whom an Award was granted
shall cease to be employed by the Corporation or its Affiliate for any reason
(other than death, disability, or retirement) prior to the completion of any
applicable Performance Period, such Award will be withdrawn upon the date of
termination of employment and subsequent payment in any form at any time will
not be made.

(e) If a Participant to
whom an Award was granted shall cease to be employed by the Corporation of its
Affiliate due to early or normal retirement (as defined by the Committee), or
in the event of the death or disability (as defined by the Committee) of the
Participant during the Performance Period stipulated in the Award, such Award
shall be prorated for the period of time from the date of grant to the date of
retirement, disability or death, as applicable, and become payable within
75 days following the close of the Performance Period to the Participant
or the person to whom interest therein is transferred by will or by the laws of
descent and distribution. Payment of such an Award shall be determined at the
same time and in the same manner (expect for applicable proration) as described
in Section 12(a).

(f) There shall be
deducted from all payments of Awards any taxes required to be withheld by any
federal, state, local or foreign government and paid over to any such
government in respect to any such payment.

Section 13. Effect of Change of Control.
Notwithstanding anything to the contrary in the Plan, in the event of a Change
of Control each Award shall be paid as if each of the pre-defined targets for
such Award was achieved at the 100% level, with such payment prorated for the
period of time from the date of grant of such Award to the date of the Change
of Control.

Section 14. Relationship to Omnibus Plans.
Awards made under the Plan prior to the effective date of the 2005 Omnibus Plan
will be subject to and governed by the 2004 Omnibus Plan. Awards made under the
Plan on or after the effective date of the 2005 Omnibus Plan will be subject to
and governed by the 2005 Omnibus Plan.

Section 15. General Provisions. The
Committee shall have full and complete authority and discretion to grant Awards
and to provide the terms and conditions (which need not be identical among Participants)
thereof, subject to the limitations set forth in the Plan, the 2004 Omnibus
Plan if the Award is granted prior to the effective date of the 2005 Omnibus
Plan and the 2005 Omnibus Plan if the Award is granted on or after the
effective date of the 2005 Omnibus Plan. No Participant or any person claiming
under or through such person shall have any right or interest, whether vested
or otherwise, in the Plan or in any Award, contingent or otherwise, unless and
until the terms, conditions, and provisions of the Plan and its approved
administrative requirements that affect such Participant or such other person
shall have been complied with. Nothing contained in the Plan or its
administrative requirements shall (i) require the Corporation to segregate
cash or other property on behalf of any Participant or (ii) affect the
rights and power of the Corporation or its Affiliates to dismiss and/or
discharge any Participant at any time.

Section 16. Assignments and Transfers.
No Award to any Participant under the provisions of the Plan may be assigned,
transferred, or otherwise encumbered except, in the event of death of a
Participant, by will or the laws of descent and distribution.

Section 17. Amendment or Termination.
The Board may amend, suspend, or terminate the Plan or any portion thereof at
any time; provided, however, that no such amendment, suspension, or
termination shall invalidate the Awards already made to any Participant
pursuant to the Plan without such Participant’s consent.

Section 18. Effective Date. The Plan
was approved by the Board of Directors of the Corporation on February 17,
2005, to be effective January 1, 2005.